Tate and Lyle reports 12% rise in profit

02/06/05 UK sugar refiner and food ingredients maker, Tate & Lyle has reported positive results for the last year with total sales increasing to £3,342 million (2004 – £3,167 million) and profit before tax, exceptional items and amortisation was £255 million, a 12% improvement on the prior year (2004 – £227 million), after a negative exchange impact of £12 million. Both sales and profit before tax and exceptional items increased, driven mainly by the successful realignment of our SPLENDA Sucralose activities with McNeil Nutritionals effective from April 2004, the company reported.

Chairman David Lees said the company has made good strategic progress and this is ongoing, uniting its businesses under the Tate & Lyle name and have maintained our focus as a high quality low cost producer, winning customer and industry awards.

Lees said that they have increased the focus on the value added component of its business, which has grown both in absolute profit terms and as a proportion of the Group total. This has been achieved firstly, through a good performance from our global food ingredients sales force, secondly through innovation in marketing, and thirdly through the successful acquisition and integration of sucralose manufacturing and ingredient sales as part of the realignment of the SPLENDA Sucralose business in April 2004.

Tate & Lyle reports a strong financial performance in the year to 31 March 2005 led by growth in SPLENDA Sucralose and other value added ingredients. Strong cash generation further improved its financial position and supports the company’s investment in future growth.

Lees said that in the year to 31 March 2006 the company expects further progress although results will reflect increased start-up costs relating to new value added facilities.

“Looking further ahead, the pressures for reform of the EU sugar regime have intensified with the recent WTO dispute panel appeal having ruled against the EU. Reform will adversely affect the future performance of our European Sugar and Food & Industrial Ingredients businesses, although we cannot quantify the consequences at this stage”, he said. Lees noted that the European Commission has indicated that formal proposals for reform will be tabled on 22 June 2005. It is the company’s intention to publish its quantification of the range of potential impacts upon our businesses after the EU Commission proposals are formally published.

Across the business the company has a number of expansion projects under way to stimulate longer term growth in our value added segment. Tate and Lyle have announced capital projects to more than triple the sucralose production capacity acquired under the realignment of the SPLENDA Sucralose activities and its new joint venture plant with DuPont to produce Bio-3G from renewable resources should begin to come on stream in our financial year ending 31 March 2007. All of these projects are progressing satisfactorily, concluded Lees.

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